Bitcoin(redirected from Bit coin)
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Bitcoin:see virtual currencyvirtual currency,
a means of payment that is electronically created and stored, more specifically an unregulated electronic medium of exchange that operates like a currency but is created and controlled by computer software; also called digital currency.
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BitcoinA peer-to-peer digital currency and electronic payments system introduced by Satoshi Nakamoto in January 2009. There is no central repository. Bitcoin is a decentralized "virtual currency" that is not controlled by any government. Bitcoin is also known as a "cryptocurrency," because transactions are encrypted and published in a chained list known as the "blockchain." Constantly expanding, the blockchain is duplicated in nodes throughout the Bitcoin network. See public key cryptography and blockchain.
Bitcoin transactions cannot be altered or reversed, and this results in a system with built-in trust. There are countless organizations on both the Web and dark Web that accept Bitcoins, and many people will do work in exchange for Bitcoins. Bitcoin spawned hundreds of imitators. See dark Web.
Bitcoins can be divided into minuscule fractions of a single coin (0.00000001 Bitcoin is equal to one "Satoshi"), and every Bitcoin fraction has a unique address for identification. Bitcoins can also be bought and sold for real money at a Bitcoin exchange, and that value fluctuates like a share of stock. For example, on January 1, 2013, one Bitcoin was worth USD $13.38. By late 2015, it was worth around $230 but two years later topped $4,000 with a market cap greater than $70B. In 2017, Bitcoin split into two versions (see Bitcoin Cash), and the original Bitcoin was greatly enhanced for performance (see SegWit).
Bitcoins Are Mined!
The strangest thing about Bitcoins is the way they come into existence. Bitcoin "miners" compete with each other to update the blockchain with new transactions, and they are rewarded with Bitcoins that they create "out of the blue" for their own account. For details, see Bitcoin mining.
Traction - Then Hacking
In late 2010, Bitcoins were becoming popular in the open source and underground communities. By mid-2011, there was an attack on the Japan-based Mt. Gox Bitcoin exchange, and someone claimed a hacker extracted 25,000 Bitcoins from his personal computer worth nearly $500,000. In early 2014, Mt. Gox filed for bankruptcy, because it was revealed that the exchange concealed the loss of hundreds of thousands of Bitcoins via hacking.
Who Is Satoshi Nakamoto?
Nakamoto's true identity was never disclosed; however, articles attributed to him are written in flawless English. Although he denied it, cryptography pioneer Nick Szabo, who designed a decentralized digital currency in the late 1990s, has been hailed as Nakamoto (maybe he reversed his NS initials to SN?). Australian computer scientist Craig Wright actually claimed to be the inventor, but that was disputed.
Government Printing vs. Bitcoin Generation
When people argue that Bitcoins are no less valid than the U.S. dollar, there is a distinction. Bitcoins have nothing to back them up but the faith of the people using them. Although the same might be said of U.S. currency, the United States has the IRS and other federal agencies to ensure that people pay taxes every year. Nevertheless, proponents claim that Bitcoin and other blockchain-based platforms are going to revolutionize all kinds of transactions worldwide.
In 2013, Germany recognized Bitcoins as a financial instrument, and the U.S. Department of Justice said Bitcoins were a valid means of exchange even though members of Congress had previously tried to invalidate them. Senior officials in both the Bank of Canada and Bank of England have proposed the possibility of a blockchain-based digital currency for their respective countries. For more information, visit www.bitcoin.org, www.bitcoincharts.com, www.blockchain.info and http://en.bitcoin.it. See BIP, Bitcoin transaction, Bitcoin mining, Bitcoin wallet, blockchain, Silk Road, Web payments service and digital wallet.